Paul Nunes

Brian A. Johnson

R. Timothy S. Breene

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">The Idea in Brief</h4>
 <div class="ideainbrief-contents">
 Are you missing the hottest growth opportunity the economy has seen in ages: the expanding affluent class? This new mass market represents 49% of the nation’s income—but only 37% of its consumption.
 How to persuade these newly moneyed consumers to spend more of their untapped discretionary income on your products and services? Fill the gap between run-of-the-mill mainstream offerings that leave mass affluents cold, and high-end luxury offerings just beyond their reach. Assume a price point two to ten times higher than your current offering—then imagine an enhanced product or service that would give customers “luxury” benefits without jaw-dropping price tags. Procter &amp; Gamble did this with Whitestrips, positioning the $40 teeth-whitening product between $8 Rembrandt (a whitening toothpaste) and $400 bleaching techniques available through dentists.
 When you reposition your offerings to catch mass affluents’ eyes, you leave rivals stagnating in low-end markets. For example, Poag &amp; McEwen’s upscale open-air shopping centers, located near well-heeled neighborhoods, earn $400 to $500 per square foot. Regional malls earn less than $300.
 The Idea in Practice
 <h2>Strategies for Selling to the Moneyed Masses</h2>
 Fill the gap between mainstream and luxury products and services. And deliver extra value by giving consumers preferred access to your offering. Example:&nbsp; 
 Members of Colorado ski resort Copper Mountain’s Beeline Advantage program get the first runs of the morning on fresh powder, as well as faster-moving lift lines, by paying twice the normal lift-ticket price. 
 Capture mass affluents’ attention. Consider making changes in any of these areas:
 <ul>
 <li>How consumers use your product. Specialized versions of everyday products hold particular appeal for the well-heeled. When Nike modified a slow-selling lightweight running shoe for water-sport use, the first 50,000 pairs sold out in less than a month.</li>
 </ul>
 <ul>
 <li>How consumers pay for your product. Rethink how your offering is paid for, and what “ownership” means. Thanks to Chicago-based Exotic Car Share, a whole new tier of well-off consumers can buy one-fifth shares in rare, antique, and luxury automobiles such as the Lamborghini Murciélago.</li>
 </ul>
 <ul>
 <li>What consumers value. As people become wealthier, they adopt an investment mind-set, prizing things that appreciate in value. Consider making your offerings perform like investments. High-end men’s shoe maker Allen-Edmonds charges customers half of what they’d pay for a new pair to “recraft” their current pair. The deal signals the shoes’ high quality, increases initial sales, and yields higher margins than original manufacture.</li>
 </ul>
 Reach mass affluents through new channels and promotions. Consider these tactics:
 <ul>
 <li>Upgrade in-store product offerings. Target Stores commissions esteemed brands like Calphalon to launch affordable kitchen- and home-product lines. This “upscale discount” strategy has attracted affluent urbanites and professionals. Nearly half of those earning $75,000 or more annually shop at Target.</li>
 </ul>
 <ul>
 <li>Establish distinctive areas in stores. Sears partners with Dell by placing kiosks in its stores, clearly branded and distinct from Sears’ more general areas.</li>
 </ul>
 <ul>
 <li>Adapt promotions to the realities of affluents’ lives. Captivate Network equips office high-rise elevators with TV screens, mixing advertising spots with news and weather forecasts from major media-company partners. The ads provide a welcome diversion, and content reaches consumers when they’re more likely to act on the information, not when they’re at home wanting a well-earned rest.</li>
 </ul>
 </div>
</article-ideainbrief>Quick question: What do Whitestrips, the SpinBrush, and the Swiffer have in common? Aside from the fact they’re all made by Procter &amp; Gamble, all have launched new billion-dollar industries in categories that have been stagnant—some would say dead—for many years. In addition, they all have price points that are multiples higher than their competitors on the shelves—and simultaneously many times lower than the high-end solutions to the problems they address. And they all share enviable margins—three to five times higher than the market leaders they supersede.

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Reprint: R0407G 

Over the past decade, the distribution of household incomes has shifted so much that a much larger proportion of consumers now earn significantly higher-than-average incomes&#8212;while still falling short of being truly rich. As a result, what used to be a no-man&#8217;s-land for new product introductions has in many categories become an extremely profitable &#8220;new middle ground.&#8221;
How can marketers capitalize on this new territory? The key, say the authors, is to rethink the positioning and design of offerings and the ways they can be brought to market.
Take, for instance, how Procter &#038; Gamble redefined the positioning map for tooth-whitening solutions. A decade ago, dental centers were popularizing expensive bleaching techniques that put the price of a professionally brightened smile in the $400 range. At the low end, consumers also had the choice of whitening toothpastes that cost anywhere from $2 to $8. P&#038;G wisely positioned itself between the two ends, successfully targeting the new mass market with its $35 Whitestrips.
In product categories where it&#8217;s clear the middle ground has already been populated, it&#8217;s important for companies to design or redesign offerings to compete. An example is the Polo shirt. How do you sell a man yet another one after he&#8217;s bought every color he wants? Add some features, and call it a golf shirt. Here, marketers have introduced designs based on the concept of &#8220;occasional use&#8221; in order to stand out.
Finally, companies wishing to reach the &#8220;almost rich&#8221; can change how they go to market. Perhaps no mass retailer has made a stronger bid for the mass affluent than Target Stores, which has pioneered a focus the company itself characterizes as upscale discount. The strategy has made Target an everyday shopping phenomenon among well-heeled urbanites and prosperous professionals.

Selling to the Moneyed Masses

Reprint: R0407G Over the past decade, the distribution of household incomes has shifted so much that a much larger proportion of consumers now earn significantly higher-than-average incomes—while still falling short of being truly rich. As a result, what used to be a no-man’s-land for new product introductions has in many categories become an extremely profitable “new middle ground.” How can marketers capitalize on this new territory? The key, say the authors, is to rethink the positioning and design of offerings and the ways they can be brought to market. Take, for instance, how Procter & Gamble redefined the positioning map for tooth-whitening solutions. A decade ago, dental centers were popularizing expensive bleaching techniques that put the price of a professionally brightened smile in the $400 range. At the low end, consumers also had the choice of whitening toothpastes that cost anywhere from $2 to $8. P&G wisely positioned itself between the two ends, successfully targeting the new mass market with its $35 Whitestrips. In product categories where it’s clear the middle ground has already been populated, it’s important for companies to design or redesign offerings to compete. An example is the Polo shirt. How do you sell a man yet another one after he’s bought every color he wants? Add some features, and call it a golf shirt. Here, marketers have introduced designs based on the concept of “occasional use” in order to stand out. Finally, companies wishing to reach the “almost rich” can change how they go to market. Perhaps no mass retailer has made a stronger bid for the mass affluent than Target Stores, which has pioneered a focus the company itself characterizes as upscale discount. The strategy has made Target an everyday shopping phenomenon among well-heeled urbanites and prosperous professionals.

Selling to the Moneyed Masses

Summary.

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